IAC/Interactive Group Spin-off (Vimeo) Deep Dive

October 9, 2023 Update

Turo (TURO) filed an updated S-1. Assuming markets stabilize in the 4th quarter, I expect the stock to go public which will be a major positive for IAC. Turo revenue has grown 23% in the first half of 2023. While this is a deceleration from 58% growth in 2022, it is nonetheless, impressive. I’m assuming Turo is worth ~$2BN and IAC’s 31% stake is worth ~$600MM. However, that assumes a 2.2 EV/revenue multiple for Turo. Airbnb trades at 6.9x revenue. IAC has been dragged down recently by a cyberhack at MGM. MGM recently disclosed that it expects a $100MM negative net income impact due to the incident. Given MGN is expected to earn ~$800MM in net income this year, a one-time $100MM hit isn’t particularly meaningful. Further, insurance is expected to reimburse MGM. I believe IAC looks compelling.

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